Category Archives: Politics Law Society

Politics Law Society

GRP Rainer Rechtsanwälte – Experience suggests planning for business succession early on

GRP Rainer Rechtsanwälte – Experience suggests planning for business succession early on

GRP Rainer Rechtsanwälte - Experience suggests planning for business succession early on

Business succession is an issue that preys on the minds of many small and medium-sized enterprises and family-run businesses. Yet finding a suitable successor can prove challenging.

In the coming years, business succession will be on the agenda of a lot of small and medium-sized companies and family-owned businesses. While searching for a suitable successor to manage the company at the highest level is of utmost importance for the survival of the business, our experience at the commercial law firm GRP Rainer Rechtsanwälte suggests there is a tendency to kick the matter into the long grass. There are several reasons for this: One the one hand, the uncertainty resulting from tax reforms is increasingly playing a role, and on the other hand, emotional reasons can make it difficult for those in charge of companies to entrust others with the fate of their business.

Demographic trends are also making it harder to find a suitable successor. More and more bosses are set to retire. At the same time, there are fewer and fewer young people available to take up the reigns. It is therefore all the more important to make plans for business succession and implement these in good time.

In the case of family-run businesses, the expectation is often for the baton to be passed on to the next generation. In doing so, it is important to consider the implications both from a tax perspective as well as with respect to succession law. One also needs to address the issue of whether, for instance, one“s own children are even interested in continuing the business, or whether they have the necessary qualifications.

Another option is to sell the business. Preparations ought to be made well in advance of the sale. In addition to searching for a potential buyer, priority should also be given to valuating the business in order to determine an appropriate selling price. It is equally important to account for existing employment contracts and inheritance claims. Depending on its corporate form, the business could also potentially be sold to a fellow partner or shareholder.

Business succession is a complex subject in relation to which a number of legal aspects need to be considered. Long-term and forward-looking planning is therefore essential. Lawyers who are experienced in the field of company law can offer advice when searching for a suitable successor and ensure a smooth transition.

https://www.grprainer.com/en/legal-advice/private-clients/law-of-succession/business-succession.html

GRP Rainer LLP www.grprainer.com/en/ is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London UK.

Contact
GRP Rainer LLP
Michael Rainer
Augustinerstraße 10
50667 Cologne
Phone: +49 221-27 22 75-0
Fax: +49 221-27 22 75-24
E-Mail: info@grprainer.com
Url: http://www.grprainer.com/en

Politics Law Society

GRP Rainer Rechtsanwälte – Assessment of authorized dealers“ right to claim compensation

GRP Rainer Rechtsanwälte – Assessment of authorized dealers“ right to claim compensation

GRP Rainer Rechtsanwälte - Assessment of authorized dealers" right to claim compensation

Not unlike in the case of commercial agents, authorized dealers may also be entitled to claim compensation after their contract has been terminated. That being said, certain conditions need to be fulfilled in order for this to happen.

There are no regulations that specifically address an authorized dealer“s right to claim compensation. However, the provisions pertaining to a commercial agent“s right to claim compensation can sometimes be applied by analogy. We at the commercial law firm GRP Rainer Rechtsanwälte note that to this end it first needs to be assessed whether the relevant requirements have been met.

Commercial agents are entitled to claim compensation after their contract has been terminated if they have established new business contacts for the company that the latter continues to be able to benefit from. Authorized dealers may also be entitled to claim compensation pursuant to these provisions. In a ruling from February 5, 2015, the Bundesgerichtshof (BGH), Germany“s Federal Supreme Court, clearly set out the conditions that need to be met for this to happen (Az.: VII ZR 315/13). The right to claim compensation only arises if the authorized dealer is integrated into the company“s sales force and obligated to make their client data available to the company. In other words, not unlike in the case of commercial agents, the company must be able to make continued use of the business contacts for its own purposes.

In the instant case, the authorized dealer did not have a right to claim compensation because the company had not been entitled to use customers“ data; the company had contractually undertaken upon termination of the contract to block any customer data it had been provided with, not to use said data and to delete it if so requested by the authorized dealer. For this reason, the BGH concluded that the company had not been able to readily exploit the customer data, and the authorized dealer was therefore not entitled to claim compensation.

The Bundesgerichtshof“s ruling raises a number of practical issues. In particular, it needs to be clarified whether the transfer of customer data has to be explicitly regulated in the authorized dealership agreement or whether this obligation can indirectly arise from the contractual provisions. Furthermore, the BGH left open the question of whether it is possible for the obligation to transfer customer data to be regulated in a separate agreement.

The right to claim compensation is a controversial topic in the case of authorized dealers. Lawyers who are experienced in the field of commercial law can advise both business and authorized dealers on drafting agreements as well as in the context of legal disputes.

https://www.grprainer.com/en/legal-advice/commercial-law.html

GRP Rainer LLP www.grprainer.com/en/ is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London UK.

Contact
GRP Rainer LLP
Michael Rainer
Augustinerstraße 10
50667 Cologne
Phone: +49 221-27 22 75-0
Fax: +49 221-27 22 75-24
E-Mail: info@grprainer.com
Url: http://www.grprainer.com/en

Politics Law Society

EGC upholds declaration of invalidity with respect to a design

EGC upholds declaration of invalidity with respect to a design

EGC upholds declaration of invalidity with respect to a design

In a ruling from March 14, 2018, the General Court of the European Union (EGC) upheld a declaration of invalidity with respect to a design. The reason: the design had already been made publicly available before its registration.

A design encapsulates a product“s appearance; its shape, its pattern, its colour. Registering a design serves to protect the design itself as well as the work put into it from counterfeiting. We at the commercial law firm GRP Rainer Rechtsanwälte note that in order for a design to be registered it needs to be distinct from other designs that are already well-known. The General Court of the European Union recently upheld a declaration of invalidity with respect to the registration of a design because it had already been made available to the public prior to its registration (Az.: T-651/16).

According to a regulation of the European Union, a Community design is capable of being protected if it is new and has individual character. A design is deemed not to be new if, among other reasons, it was made publicly available prior to the 12 months preceding the date of priority claimed. An exception is that the relevant professional circles within the EU could not have been aware of it.

In the instant case, a US company had applied in November of 2004 to have a Community design registered for shoes and in doing so claimed priority from a patent application submitted in the USA on May 28, 2004.

In 2013, a French company applied to have the design declared invalid on the basis that it was not new. It argued that the design in question had already been made available to the public prior to May 28, 2003. As such, it was claimed that the design had been known to the public for more than the 12 months prior to the patent application. In 2016, the European Union Intellectual Property Office (EUIPO) declared the design invalid on account of its lack of novelty.

The EGC upheld the decision. It ruled that the design had been made available to the public prior to May 28, 2003. The Court went on to note that it was not necessary for the disclosure to have taken place within the EU.

A design is distinct from a protected trademark. It is possible for trademark rights to be violated even if there is merely the potential for confusion with the protected product. Lawyers who are experienced in the field of intellectual property law can offer advice.

https://www.grprainer.com/en/legal-advice/intellectual-property-law-and-trademark-law.html

GRP Rainer LLP www.grprainer.com/en/ is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London UK.

Contact
GRP Rainer LLP
Michael Rainer
Augustinerstraße 10
50667 Cologne
Phone: +49 221-27 22 75-0
Fax: +49 221-27 22 75-24
E-Mail: info@grprainer.com
Url: http://www.grprainer.com/en

Politics Law Society

BGH on managing directors“ liability for competition violations

BGH on managing directors“ liability for competition violations

BGH on managing directors" liability for competition violations

Managing directors may be liable for their company“s violations of competition law. Having said that, the Bundesgerichtshof (BGH), Germany“s Federal Supreme Court, has severely limited managing directors“ liability (Az.: I ZR 242/12).

Under earlier case law, the liability of managing directors in the event of competition violations was interpreted more broadly. Liability was a serious prospect even if the managing director became aware of competition violations committed by employees but made no effort to stop them. In a ruling from June 18, 2014, the BGH distanced itself from this precedent. In doing so, we at the commercial law firm GRP Rainer Rechtsanwälte note that it significantly reduced the scope of managing directors“ liability for violations of competition law.

According to this ruling, managing directors shall only be personally liable for unfair trading practices if they were either actively involved or ought to have prevented the competition violations because of an affirmative obligation to act pursuant to the general principles of tort law. The BGH held that a managing director“s status as an executive body and general responsibility for business operations do not by themselves give rise to a duty on his or her part towards external third parties to prevent violations of competition law. However, personal liability shall still apply if the managing director personally commits or orders the competition violation in question.

While the managing director“s duty to manage the business in a prudent manner was said to encompass ensuring that legal infringements such as competition violations do not occur, the BGH went on to say that this duty exists only in relation to the company and not external third parties. In the case of general liability, this would impose an almost incalculable risk on the managing director.

This judgement does not fundamentally preclude personal liability on the part of managing directors in the event of competition violations but rather limits its scope. Liability on the part of a managing director requires that the competition violation be based on conduct that can be blamed on the managing director. By way of example, the BGH cited unlawful use of a company name or a company“s general approach to advertising and marketing, matters which would normally be decided at an executive level by managing directors.

It is possible for managing directors to be faced with liability vis-à-vis their company. Lawyers who are experienced in the field of company law can serve as an expert point of contact when it comes to issues pertaining to managing directors“ liability.

https://www.grprainer.com/en/legal-advice/company-law.html

GRP Rainer LLP www.grprainer.com/en/ is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London UK.

Contact
GRP Rainer LLP
Michael Rainer
Augustinerstraße 10
50667 Cologne
Phone: +49 221-27 22 75-0
Fax: +49 221-27 22 75-24
E-Mail: info@grprainer.com
Url: http://www.grprainer.com/en

Politics Law Society

BSG on mandatory social security contributions for managing directors

BSG on mandatory social security contributions for managing directors

BSG on mandatory social security contributions for managing directors

Mandatory social security contributions for managing directors are a controversial subject. The Bundessozialgericht (BSG), Germany“s federal supreme court in relation to social security matters, recently ruled that managing directors shall, as a rule, be deemed to be employees of a GmbH.

The issue of mandatory social security contributions for managing directors can sometimes give rise to significant supplementary contributions. In its judgments from March 14, 2018 (Az.: B 12 KR 13/17 R and B 12 R 5/16 R), the BSG held that managing directors of a GmbH, a type of German private limited company, shall, as a rule, be deemed to be employees of the GmbH and thus subject to mandatory social security contributions. The Court set forth strict requirements for a managing director to be classified as self-employed. In particular, we at the commercial law firm GRP Rainer Rechtsanwälte note that it is essential that the managing director has sufficient legal scope for action for the purpose of determining the fate of the company.

In the first case, the managing director bringing the legal action owned a 45.6 per cent interest in the registered share capital. Additionally, there was a so-called „Stimmbindungsabrede“, i.e. a voting commitment, with the GmbH“s second shareholder. In the other case, the managing director held only 12 per cent of the registered share capital. In both cases, the BSG ruled that the managing directors were to be deemed to be employees of the respective GmbHs and thus subject to mandatory social security contributions.

In its reasoning, the BSG noted that shareholder-managing directors of a GmbH shall only not be classified as employees if they have the legal authority to determine the fate of the company by exerting influence on the general meeting of the shareholders. This was said to be generally possible if the managing director holds more than 50 per cent of the registered share capital and is thus the majority shareholder. The Court went on to say that if the managing director holds only 50 per cent of the shares in the registered share capital or less, an employee relationship can then only be ruled out if the managing director has a full blocking minority stake as per express provisions in the articles of association and he or she is therefore able to prevent instructions being issued by the general meeting of the shareholders.

The BSG also stressed that it is not a matter of which powers the managing director has with respect to the GmbH“s external relations or how much latitude he or she has in carrying out their activities, e.g. with regard to working hours; the decisive factor is that the managing director has sufficient legal authority.

Lawyers who are experienced in the field of company law can advise managing directors and shareholders in relation to mandatory social security contributions.

https://www.grprainer.com/en/legal-advice/company-law.html

GRP Rainer LLP www.grprainer.com/en/ is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London UK.

Contact
GRP Rainer LLP
Michael Rainer
Augustinerstraße 10
50667 Cologne
Phone: +49 221-27 22 75-0
Fax: +49 221-27 22 75-24
E-Mail: info@grprainer.com
Url: http://www.grprainer.com/en

Politics Law Society

BFH – Withdrawal of a partner with neutral impact on profits

BFH – Withdrawal of a partner with neutral impact on profits

BFH - Withdrawal of a partner with neutral impact on profits

In its rulings from May 16 and 30, 2017, the Bundesfinanzhof (BFH), Germany“s Federal Fiscal Court, has made it easier for a partner to withdraw from a partnership (Az.: IV R 31/14 and IV R 11/15).

In the view of the Bundesfinanzministerium, Germany“s Federal Ministry of Finance, the withdrawal of a partner need only have a neutral impact on profits if the withdrawing partner receives an operational unit or a partnership interest. In its rulings, the Bundesfinanzhof has taken a position contrary to this view. We at the commercial law firm GRP Rainer Rechtsanwälte note that pursuant to these rulings, partners now have more scope than was previously the case when withdrawing from partnerships while maintaining a neutral impact on profits and thus without disclosing hidden reserves.

In one of the cases, the partner had initially incorporated his share in a Kommanditgesellschaft (KG), a type of limited partnership under German law, into a newly established „Ein-Mann-GmbH & Co. KG“, i.e. a one-man limited partnership with a limited liability company (GmbH) as general partner. This withdrew from the KG on the same date and received in consideration all of the assets from a business division of the KG that was not organized as an operational unit. This business division was then continued by the newly established GmbH & Co. KG. While the tax authorities deemed this to be a profitable swap, the BFH took a different view in categorizing the transaction as an artificial division of partnership assets with a neutral impact on profits (Az.: IV R 11/15).

In the other case, a GmbH & Co. KG run by a father and son had been dissolved. The father received only a small proportion of the company“s assets; the lion“s share went to the son, who carried on the business alone. The competent tax office rejected the classification as a division of partnership assets with a neutral impact on profits, stating in its reasoning that the son had continued the business. The BFH took a different view here as well. It held that the company had ceased its activities as a consequence of its dissolution and complete termination, and there could therefore be said to have been a real division of partnership assets with a neutral impact on profits (Az.: IV R 31/14).

It follows from these two rulings of the BFH that the dissolution of a company and subsequent distribution of its assets among the partners is equivalent to a partner withdrawing from a continuing company.

Lawyers who are experienced in the field of company law can advise on matters ranging from the establishment to the dissolution of a company, with due consideration also being given to aspects relating to tax law.

https://www.grprainer.com/en/legal-advice/company-law.html

GRP Rainer LLP www.grprainer.com/en/ is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London UK.

Contact
GRP Rainer LLP
Michael Rainer
Augustinerstraße 10
50667 Cologne
Phone: +49 221-27 22 75-0
Fax: +49 221-27 22 75-24
E-Mail: info@grprainer.com
Url: http://www.grprainer.com/en

Politics Law Society

Improper extension of a discount campaign

Improper extension of a discount campaign

Improper extension of a discount campaign

Caution is advised when extending a fixed-term discount campaign. Extending the campaign may constitute misleading advertising and thus a violation of competition law.

There are good reasons for extending a fixed-term discount campaign. However, we at the commercial law firm GRP Rainer Rechtsanwälte note that this is only legal under certain circumstances. If the campaign is extended due to circumstances that should have been foreseen by a company exercising professional diligence and thus ought to have been considered when planning the discount campaign, including the advertising, then consumers are deemed to have been misled and a violation of competition law has occurred as a result of the extension. That was the verdict of the Landgericht (LG) Dortmund, the Regional Court of Dortmund, in a ruling from June 14, 2017 (Az.: 10 O 13/17).

In the instant case, a furniture store had advertised in print media and online with a discount campaign running from the 17th to the 24th of December, 2016. The campaign was later extended to December 31, 2016. A competitor who found this practice misleading brought an action against it. The defendant argued that the campaign had been extended because a number of competitors were advertising particularly intensively during this time, and that they could not have foreseen this.

The LG Dortmund upheld the action, concluding that the advertising in question was misleading. It held that a fixed term ending on December 24 had clearly been applied to the discount campaign. The Court went on to state that this date is also seen by consumers as the final day of the Christmas shopping period, meaning that they had no reason to assume the campaign would be extended.

Advertising with a fixed-term discount campaign was said to be misleading if the intention from the outset was to extend the campaign. Consumers can also be said to have been misled if the campaign was extended due to circumstances that ought to have been foreseen by the company. The Landgericht noted that intensive advertising featuring discounts at the end of the year is not unusual. As such, the defendant should have foreseen this situation. The advertising was therefore found to be misleading and in violation of the Gesetz gegen den unlauteren Wettbewerb (UWG), Germany“s Unfair Competition Act, as applying a fixed term to a discount campaign means consumers are pressed for time and can result in them arriving at a decision that they would not otherwise have taken.

When it comes to advertising, violations of competition law can easily occur even unwittingly. Lawyers who are experienced in the field of intellectual property law can offer advice.

https://www.grprainer.com/en/legal-advice/intellectual-property-law-and-trademark-law.html

GRP Rainer LLP www.grprainer.com/en/ is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London UK.

Contact
GRP Rainer LLP
Michael Rainer
Augustinerstraße 10
50667 Cologne
Phone: +49 221-27 22 75-0
Fax: +49 221-27 22 75-24
E-Mail: info@grprainer.com
Url: http://www.grprainer.com/en

Politics Law Society

Competition law – The term „Praxisklinik“ does not entail inpatient treatment

Competition law – The term „Praxisklinik“ does not entail inpatient treatment

Competition law - The term "Praxisklinik" does not entail inpatient treatment

A dentist is allowed to promote his or her homepage with the term „Praxisklinik“, i.e. „(practice) clinic“, even if they do not admit patients for extended periods of time as inpatients. That was the verdict of the Landgericht (LG) Essen, the Regional Court of Essen.

The following facts and circumstances informed the LG Essen“s judgment from November 8, 2017 (Az.: 44 O 21/17): A dentist had made repeated use of the term „Die Praxisklinik“, in other words „the clinic“, on his website for promotional purposes and was admonished by an association representing commercial interests for doing so. The Association viewed the term „Praxisklinik“ as misleading to consumers and a violation of competition law, stating in its reasoning that the clinic did not admit patients for extended periods of time as inpatients. It went on to claim, however, that the term „Klinik“ is synonymous with „Krankenhaus“, i.e. hospital, in the eyes of consumers and thus entails the possibility of inpatient treatment.

The injunction was nonetheless unsuccessful. The Court held that the term „Praxisklinik“ was not misleading in terms of the Gesetz gegen den unlauteren Wettbewerb (UWG), Germany“s Unfair Competition Act. The LG Essen took the view that consumers“ understanding of the term „Praxisklinik“ entailed an outpatient facility where surgical procedures can also be performed. It noted that while the term „Klinik“ was originally regarded as being synonymous with „Krankenhaus“, it now covers both inpatient as well as outpatient facilities. By positioning the word „Praxis“ immediately before „Klinik“, this was said to restrict consumers“ understanding to encompass only outpatient treatment. The Court concluded that consumers understand the term „Praxisklinik“ to mean an outpatient facility where surgical procedures are also possible.

The Court“s ruling shows that the meaning of the word „Klinik“ in its use as an integral part of a larger concept has since been stretched to more than a synonym for hospital. It drew a parallel with the term „Tagesklinik“, literally „day clinic“. We at the commercial law firm GRP Rainer Rechtsanwälte note that in this example it was also said to be evident that patients are not admitted as inpatients.

Violations of competition law are nevertheless easily committed and can be met with severe penalties. Lawyers who are experienced in the field of competition law can offer advice as well as enforce or fend off claims in the event that violations of competition law occur.

https://www.grprainer.com/en/legal-advice/intellectual-property-law-and-trademark-law/competition-law.html

GRP Rainer LLP www.grprainer.com/en/ is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London UK.

Contact
GRP Rainer LLP
Michael Rainer
Augustinerstraße 10
50667 Cologne
Phone: +49 221-27 22 75-0
Fax: +49 221-27 22 75-24
E-Mail: info@grprainer.com
Url: http://www.grprainer.com/en

Politics Law Society

LAG Hamm – Prohibited surveillance in the workplace

LAG Hamm – Prohibited surveillance in the workplace

LAG Hamm - Prohibited surveillance in the workplace

Monitoring employees using video surveillance is only permitted within narrow boundaries. Illegal recordings cannot therefore be used as evidence in the context of workplace legal disputes.

There are justifiable reasons for monitoring the workplace using video cameras. Particularly in areas which are accessible to the public such as storefronts, video cameras are a common sight. However, this needs to be readily apparent to customers and employees alike. We at the commercial law firm GRP Rainer Rechtsanwälte also note that the recordings must always be deleted as soon as possible once they are no longer capable of fulfilling their intended purpose or the legitimate interests of the persons“ affected preclude their ongoing storage.

In a case heard by the Landesarbeitsgericht (LAG) Hamm, the Regional Labour Court of Hamm, a storefront had been monitored by three video cameras. This was clearly indicated and the employees were informed. According to the employer, the video surveillance was meant to provide information on criminal offences committed by third parties. The employer went on to claim, however, that an analysis of the video footage also revealed that one of the employees had acquired money or goods by illegal means. The employer terminated the employment relationship with immediate effect and demanded compensation in the amount of approximately 10,000 euros.

The employee in question initially instituted an action for wrongful dismissal but later withdrew this. She nonetheless demanded payment of her outstanding wages and that the claim for compensation be dismissed. The relevant labour court found in favour of the employee, and the employer“s subsequent appeal before the LAG Hamm was unsuccessful.

In its judgment from June 12, 2017, the LAG Hamm held that the employer had not been able to demonstrate misconduct that would justify the extent of the claim for compensation. Furthermore, the video footage could not be used as evidence. The Court went on to say that the video sequences were excluded from being used as evidence for reasons of data protection and individual privacy. It ruled that any data collected must always be deleted immediately once it is no longer required for the purposes of achieving its aim or the legitimate interests of those affected preclude its ongoing storage. The Court proceeded on the basis of a period of one to two or certainly no more than a few business days. In the instant case, the data had been stored for three months. After weighing up the interests of all sides, the OLG found that this data protection violation gave rise to an exclusion of evidence.

Lawyers who are experienced in the field of employment law can advise on all matters pertaining to the workplace.

https://www.grprainer.com/en/legal-advice/employment-law.html

GRP Rainer LLP www.grprainer.com/en/ is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London UK.

Contact
GRP Rainer LLP
Michael Rainer
Augustinerstraße 10
50667 Cologne
Phone: +49 221-27 22 75-0
Fax: +49 221-27 22 75-24
E-Mail: info@grprainer.com
Url: http://www.grprainer.com/en

Politics Law Society

Power of attorney can constitute a valid will

Power of attorney can constitute a valid will

Power of attorney can constitute a valid will

It is possible for a power of attorney to constitute a valid will. That was the verdict of the Oberlandesgericht (OLG) Hamm, the Higher Regional Court of Hamm, in a ruling from May 11, 2017 (Az.: 10 U 64/16).

A will should always be clearly recognizable as the testator“s final wishes to prevent disputes from arising among the heirs. We at the law firm GRP Rainer Rechtsanwälte note that it will ideally have an unambiguous heading such as „my will“ or „my final wishes“. That being said, even personally prepared documents that, for instance, feature the heading „Vollmacht“, i.e. „power of attorney“, are capable of constituting a valid will. That was the verdict of the Oberlandesgericht Hamm in a recently published ruling.

In the case in question, the testatrix had drafted a testamentary disposition featuring the heading „Testament“ (will) in which she provided that her two sisters were to inherit half of her detached house each. Only a few days later, the testatrix prepared another document with the heading „Vollmacht“ in which she granted her niece power of attorney in relation to her savings contract with a building society, her checking account, savings book and financial investments beyond her death and to have the balances paid out to her.

There was no disagreement regarding the fact that the testatrix had designated her sisters as co-heirs to half of the estate each as per the will, as the house represented the testatrix“s main asset. The probate court issued a certificate of inheritance accordingly.

What was disputed, however, was whether the testatrix“s niece was entitled to inherit. The latter argued that her aunt had allocated the balances to her as legacies and that the second document was not merely a power of attorney but rather a will. The OLG Hamm found in the niece“s favour, concluding that the power of attorney granted constituted a valid will. The Court went on to say that it had been personally written and signed by the testatrix, and thus met the formal requirements for it to be a will. Moreover, it was possible to identify a serious intention to make a will; the fact that the document featured „Vollmacht“ as its heading did not, according to the OLG, count against this, because it was already clear from the will that the testatrix was not familiar with the usual wording associated with a testamentary disposition. It could therefore be assumed that the testatrix had wanted to bequeath the balances to her niece.

A will should always be clearly worded to ensure that testamentary dispositions are in fact capable of being implemented in accordance with the wishes of the testator. Lawyers who are experienced in the field of succession law can offer advice.

https://www.grprainer.com/en/legal-advice/private-clients/law-of-succession/last-will-and-testament.html

GRP Rainer LLP www.grprainer.com/en/ is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London UK.

Contact
GRP Rainer LLP
Michael Rainer
Augustinerstraße 10
50667 Cologne
Phone: +49 221-27 22 75-0
Fax: +49 221-27 22 75-24
E-Mail: info@grprainer.com
Url: http://www.grprainer.com/en